End-user spending on IT services in India is on track to total $18 billion in 2021, an increase of 10.7% from 2020, according to Gartner, Inc.
“The Indian IT services market has proven its durability through the last 15 months of the pandemic. The surge in remote working, need for business continuity planning and increased focus towards digitalization has increased the demand for IT services,” said Arup Roy, research vice president at Gartner. “In 2020, spending on IT services slowed, but did not decline. While some digitalization projects were stalled due to IT budget contractions and economic uncertainties in 2020, 2021 is experiencing renewed interest in rapid digitalization from end-user organizations.”
The consulting segment will be the largest in terms of end-user spending in 2021. It is forecast to total $4.6 billion this year, up from $4.1 billion in 2020. (see Table 1). Hardware support will be the only segment where spending will decline in 2021. It will decline 2.8% as end-user organizations reduce their spending on client device support and data center support systems.
Table 1. IT Services End-User Spending by Segment, India, 2019-2021 (Millions of Dollars)
|Business Process Services||1,646||1,686||1,783|
|Infrastructure Implementation and Managed Services||4,469||4,389||4,594|
|Infrastructure as a Service (IaaS)||725||1,075||1,689|
|Application Implementation & Managed Services||3,993||4,022||4,372|
Due to rounding, some figures may not add up to the totals shown.
“Organizations in India are moving towards a cloud-only or a cloud-first model, which is why spending on infrastructure as a service (IaaS) will experience strong growth in 2021,” said Roy. “Indian enterprises are demanding more agility, rapid innovation and a swift move towards becoming a composable enterprise resulting in an increased adoption of cloud through 2021.”
In 2021, end user spending on IaaS will total $1.6 billion, growing 57% as compared to 2020. This will be the highest registered growth rate within all segments of IT services spending in India. While IaaS is expected to contribute to 9% of the total spending on IT services in the country in 2021, by 2025, spending on IaaS is forecast to make up 22.7% of the total spending on IT services in India.